Research Quarterly
Published by the Society for Human Resource Management
Business Ethics:
The Role of
Culture and
Values for an
Ethical Workplace
FOURTH QUARTER–2009
Whether in domestic or global companies, ultimately, the commitment
to business ethics and the foundation is built through organizational
culture, with ethical values reflected in the workplace.
Business Ethics: The Role of Culture and Values for
an Ethical Workplace
Abstract
An ethical workplace is established through an organization’s culture, values and leadership. To promote ethical
behavior, human resource professionals, people managers and senior management need to be knowledgeable about
business ethics—from leadership, codes of conduct and related legislation to compliance training, ethical decisionmaking, and cultural and generational differences around ethics. Transparency, fairness and communication are key for
establishing and maintaining an ethical workplace.
Introduction
In the business world today, issues
of trust, respect, fairness, equity
and transparency are gaining more
attention. Business ethics includes
organizational values, guidelines and
codes, legal compliance, risk management, and individual and group
behavior within the workplace.
Effective leadership, with open dialogue and thoughtful deliberation,
develops the foundation of an ethical
workplace, is woven into the fabric
of the organizational culture and is
mirrored in ethical decision-making.
Toward this end, all organizational
leaders have a key role in establishing corporate values and modeling
ethical behavior for their workforce,
organization and community.
The importance of ethical leadership
has grown exponentially. A 2009
special report from the Business
Roundtable Institute of Corporate
Ethics and the Arthur W. Page Society focuses on the issue of leadership
and trust. The Dynamics of Public
Trust in Business—Emerging Opportunities for Leaders emphasizes that
trust is a critical factor in business.
The report points out that “even in
the best of times, the dynamism of
trust requires continual monitoring
and rebalancing as economic and
social situations change.” Companies can create positive business
ethics by generating goodwill,
communicating openly and taking
advantage of opportunities for
leaders to create value based on a
foundation of accountability, responsibility and integrity. Ultimately,
trust—through good business
ethics—“positively impacts business
success in a number of critical areas,
such as employee performance, customer retention and innovation.”1
While not inclusive of all aspects of
business ethics, this research article
focuses on organizational culture
and values as integral in the foundation of an ethical workplace. The
primary audiences—human resource
professionals, people managers and
senior management—will find this
article useful to thoughtfully consider the state of business ethics in
their respective companies, identify
related challenges and opportunities,
and rethink how better to communicate, restructure and/or reframe
policies and practices that influence
the organization’s ethical stance.
Business Imperative
Organizational culture and ethical leadership are at the core of
business ethics. Each shapes and
reinforces corporate values, and
influences employee attitudes and
behaviors. Broadly defined, business ethics includes ethical conduct,
legal compliance and, in some cases,
corporate social responsibility.
Ethics-related outcomes can be seen
in nearly every aspect of a company, from employee perceptions of
fairness, to employee engagement
and retention, and ultimately, as
U.S. and global executives note, to
reputation and sustainability (see
SHRM’s 2008 Executive Roundtable Symposium on Sustainability and
Human Resource Management).2
The establishment of business ethics
as policy is not new. A number of
business codes were established and
in use in the 1920s. In fact, the
retailer J. C. Penny Company introduced a company code of conduct
in 1913.3 The focus on business
ethics, particularly ethics policies
and programs, rapidly grew in the
United States in the 1980s and
1990s in response to government
and legal pressures. The Defense
Industry Initiative (DII), created in
the 1980s in response to government regulations, was developed for
defense contractors to comply with
a high standard of conduct. DII was
the first organized attempt at creating standard ethics and compliance
programs. In 1999, a survey of a
sample of Fortune 1000 companies
by researchers Weaver, Treviño and
Cochran found that only 20% had
adopted ethics polices prior to 1976
Business Ethics: The Role of Culture and Values for an Ethical Workplace 1
and 60% since the mid-1980s.4 A
series of high-visibility corporate
scandals (such as Enron, Arthur
Anderson, WorldCom) resulted in
the Sarbanes-Oxley Act (SOX) of
2002, the goal of which is to foster
truthful communication between
company officers and shareholders in publicly traded companies.
In today’s global marketplace, HR,
ethics and compliance officers, and
Leadership and
Organizational Culture
Corporate integrity is reflected in
leadership. “Because sound ethical
behavior continues to erode within
society, it is vital that an organization’s leaders model the ethical
behavior they require from staff
members,” notes Norman Howard,
Director of Human Resources, W.
K. Kellogg Foundation. “Thus,
the culture of an organization
plays a critical and essential role in
In today’s global marketplace, HR, ethics and
compliance officers, and organizational
leadership must also be cognizant of cultural
differences that influence business ethics.
organizational leadership must also
be cognizant of cultural differences that influence business ethics.
In different countries, there are
cultural variations around business ethics, such as cultural norms,
legislation, communication styles,
etc. In Europe, for example, there
is a history of socially mandated
employee involvement in businesses,
where the U.S. style of codes of
conduct may not be applicable.
Other cultural differences, such
as indirect communication styles
and the need to save face, require
sensitivity for ethics-related communications. U.S. corporate ethics
programs tend to reflect American
cultural norms, such as individualism. In contrast, collectivist societies
use different communication styles
to address interpersonal and ethical
problems. Whether in domestic or
global companies, ultimately, the
commitment to business ethics and
the foundation is built through
organizational culture, with ethical
values reflected in the workplace.
2
defining the importance of ethics
both in how it respects employees
and how it conducts business.”
An ethical culture is developed
through communication, rules,
leadership, rewards, rituals and
stories. The realm of business ethics
and organizational culture includes
the views of employees and management, individual and organizational
values, and constant compliance and
principle-driven ethics. Attitudes
and behaviors are reinforced over
time through codes of conduct,
behavioral modeling by senior staff,
ethical decision processes and ethics
training. Three key questions to
ask within an organization are:
1) how does the company culture
portray organizational values; 2) do
company policies reflect corporate
values that form the platform for
ethical leadership and corporate
governance; and 3) are employees
treated fairly and consistently?5
Leadership determines how effectively this is accomplished. As
pointed out in an article titled “The
Ethical Commitment: Building
Value-Based Cultures,” employees
want to trust management and
know that their needs and wellbeing are considered. Managers
demonstrate trustworthiness when
they listen to employees, account
for their actions and explain reasons
for decisions.6 Data from the 2009
National Business Ethics Survey,
conducted by the Ethics Resource
Center, reveal employees’ views
about whether leadership sets a good
example of ethical behavior, with
80% approval for top management
and 86% for direct supervisors.7
Finally, regular assessments of
company ethics by HR and senior
management are critical (see Figure
1). This may include policies and
programs, the code of conduct,
ethics communications, ethics
training and employees opinion
surveys. Key questions to consider
are: 1) is the company sending the
message that it promotes ethical
behavior; 2) is it concerned with
the welfare of employees or is the
goal to protect the company; and
3) is the formal ethics program
outsourced for cost savings (on the
Internet), thoughtfully focused
on the nuances of the organizational culture, and to what degree
is senior management involved?8
Organizational Ethics
Standards and Practices
In some organizations, HR may
be responsible for ethics in terms
of programs, discipline and communication. In a company without a
formal ethics and compliance function, the chief HR professional often
serves as the ethics officer, and the
HR department promotes ethical
conduct and training. The SHRM/
Ethics Resource Center 2008
survey report The Ethics Landscape
in American Business: Sustaining a
Strong Ethical Work Environment
documents that the majority (83%)
of HR professionals believe that
the HR department is a primary
resource for ethics-related issues.
Many feel that they are not part of
the ethics infrastructure, yet are
often requested to assist or remedy
situations caused by ethical violations. However, the key findings
show that HR professionals, in general, are in agreement that nonmanagement employees, supervisors and
top management: 1) support them in
following their organization’s ethics
standards; 2) talk about the importance of workplace ethics and doing
the right thing in their work; 3) set
a good example of ethical behavior;
and 4) are held accountable if they
are found to be in violation of the
organization’s ethics standards.9
The platform for an ethical workplace is the code of conduct. It
describes a value system and ethical
principles and outlines specific
ethical rules embodied by the
organization. Written standards of
ethical conduct cover a number of
areas, such as compliance and laws,
confidential or proprietary information, conflicts of interest, use of
company assets, and acceptance of
or providing gifts, gratuities and
entertainment. The purpose of a
code of conduct is to raise ethical
expectations; focus on dialogue
about ethical issues; encourage ethical decision-making; and prevent
misconduct and establish a platform
for enforcement.10 Through the
code of conduct, with clear language and specific illustrations of
how ethical principles apply to the
workplace setting, organizations
put employees—including management—on notice that there are
consequences of not complying and
expectations for certain behavior.11
Two broad incentive categories
encourage ethical behavior: reward
and recognition systems, and
performance evaluation systems.
Companies may use public acknowledgment of individuals or teams
who go “above and beyond the call
of duty” as a vehicle to reinforce
ethical behavior. For example, an
annual ceremony to present the
“President’s Award for Integrity and
Business Ethics” is one way to thank
employees for their exemplary work
and set examples for others. Performance reviews may include a section
on corporate values, such as how
the employee demonstrates respect,
Figure 1 | Ten Questions to Assess Your Company and Its
Procedures About Decision-Making
QQ
Do you give your employees an opportunity to express their views before decisions are made?
QQ
Are all employees treated with respect and dignity?
QQ
Does the company promote consistent application of the rules across situations?
QQ
Does the company discourage the influence of personal biases on decisions?
QQ
Are the needs of employees considered?
QQ
Are decisions made based on accurate information?
QQ
Is honest feedback provided about why decisions are made?
QQ
Are the rights of employees respected?
QQ
Are managers consistent in their views about appropriate ethical standards?
QQ
Are opportunities provided to appeal decisions that employees disagree with?
Source: Adapted from Tyler, T., Dienhard, J., & Thomas, T. (2008, Winter). The ethical commitment to
compliance: Building value-based cultures. California Management Review, 50 (1), 31-51.
inspires others, engenders trust and
confidence, keeps commitments,
etc. Such recognition helps maintain
focus on the company’s philosophy about business ethics, the real
impact on the workplace culture by
the employees and the company’s
standing in the marketplace.
Ethics and Generational
Differences
Understanding generational
differences—and finding common
ground—helps improve communication in the workplace (see Figure 2).
The SHRM white paper Ethics and
Generational Differences: Interplay
Between Values and Ethical Business
Decisions examined how different
generations approach questions of
integrity and purpose. The authors
point out that “with value systems
and motivation at the heart of
ethics—and divergent value systems
seemingly inherent within the four
generational groups—the existence
of varied ethical perspectives among
co-workers is not a surprise.”12
A common area of tension among
generations focuses on work ethic,
and conflict often stems from how
it is defined. Traditionalists and
Baby Boomers may criticize the two
younger generations about their lack
of work ethic, since older generations often equate strong work ethic
to being part of the organization
(and being physically present in the
office) for long periods of time. Baby
Boomers consider a combination of
factors—collaboration, teamwork
and meetings—as evidence of work
ethic. Generation X and Millennials
see work ethic as working hard—
often autonomously—with a positive
impact on the company while also
living a full life outside of their job.
Yet, research shows that no matter
one’s age, people value achievement,
balance and responsibility, and want
Business Ethics: The Role of Culture and Values for an Ethical Workplace 3
credible, trustworthy leadership (see
SHRM’s Research Quarterly “The
Multigenerational Workplace”).13
The commitment of the Millennial
generation (Gen Y) to volunteerism points to idealism and the
confidence that one individual can
positively affect society. Volunteerism is an opportunity for organizations to showcase ethical and moral
behavior through community service
(see Volunteerism—Moving Up on the
Strategic Agenda).14 A recent study
from Deloitte found that nearly
two-thirds of respondents aged 18
to 26 prefer to work at firms that
offer opportunities to their employees to volunteer their professional
skills at nonprofit organizations.15
“It is the idealism that this generation of young employees brings to
the workplace that can also portend the potential vulnerability of
their moral compass,” says human
resource consultant Joy Gaetano,
SPHR, president of Gaetano Group
and a SHRM Ethics Special Expertise Panel member. “An organization that can establish clear ethical
guidelines, set policy standards and
provide a culture that nurtures ethical decision-making and values gains
respect as an ‘employer of choice’
where a young employee can focus
on optimizing his or her workplace
talent rather than feel compromised by workplace conduct.”
Ethical Decision-Making
Values drive decision-making. In
the sometimes confusing maze of
decisions, employees and managers
may at times feel conflicted by their
personal values and the corporate
message. In today’s busy workplace,
managers have to make decisions
quickly, are influenced by shortterm pressures and therefore may
fail to adequately focus on social
norms and ethical principles. When
confronted with ethical decisions,
guidelines about ethical-decision
making are valuable tools and can
be presented in a corporate ethics
program, during a staff meeting
or as part of an employee-manager
mentorship. These guidelines
provide a framework for learning
(e.g., where do workers learn what
Figure 2 | Key Points for Ethical Business Management
of Different Generations
QQ
Develop an internal campaign, with ethics as the #1 value for the organization and employees.
QQ
Avoid stereotyping employees according to their generation.
QQ
QQ
QQ
Clearly identify the priorities of the company and then link them to the priorities and values of
employees to support business decisions.
When possible, learn the values and motivation of employees and then connect them to individual and organizational goals.
Focus on business results, not on methodology (as long as it is ethical). All groups want to
contribute and achieve but may do so differently.
QQ
To make ethical guidelines relevant to everyone, establish ongoing training and support sessions.
QQ
Look for commonality among employees of different generations.
QQ
Embrace diversity of opinion and methodology.
QQ
QQ
Err on the side of more communication, such as using different types of media: face-to-face
meetings, e-mail blasts, etc.
Remember to respect the dimensions of differing generations (age, technological savvy, alternative work experiences, innovation, etc.)
Adapted from: Guss, E., & Miller, M. C. (2008 October). Ethics and generational differences: Interplay
between values and ethical business decisions [white paper]. Retrieved from www.shrm.org.
4
is acceptable in the workplace) as
well as opportunities to reinforce
corporate values. Such discussions
are important in management
training—for new managers, managers new to the company and longerterm managers alike—to highlight
how value-based decision-making
fits within the organization’s mission and vision (see Figure 3).
The concept of moral motivation—
why should I do the right thing?—is
the focus of a recent article in
the Journal of Business Ethics. The
authors explored moral motivation
through the lens of applicability
to corporate ethics programs. The
value of this study lies in offering a basis for discussion of how
and why decisions are made (i.e.,
what is the ethical foundation/
reasoning). The ethical theories
of moral philosophers (Aristotle’s
ethics of virtue, Kant’s categorical
imperative and Mill’s utilitarianism/greatest happiness principle)
identify key ethical leadership skills
that are important for today’s
workplace: 1) practical wisdom—
personal integrity and good
character, 2) moral reasoning—
compliance with corporate ethics,
and 3) moral feelings—cost/benefit
analysis (for all stakeholders).16
Mini-Case Study:
John’s Decision
John Hart was a division manager
at Atlantic Soda, a large bottling
conglomerate with more than
30 companies. He was asked
to meet with Bill Goodwin (his
boss) and Bob Martin (regional
division manager for a competitor, Mid-Major Pop). John had
joined the firm six months earlier
and was known for his track record of hard work and excellent
sales results. In Atlantic’s culture
of rewarding performance and
talent, John had already been
promoted twice. At the meeting,
Goodwin discussed the intense
price competition between Atlantic Soda and Major Pop. He
suggested that they establish
a mutual set of prices. The two
principals agreed. However, John
would have the responsibility to
implement this arrangement in
his region.
This true story illustrates an
opportunity for an ethical decision. Pressures were exerted by
John’s manager to sway the decision. John had options to consider:
personal/company achievement
or his personal and the company’s
integrity. He made the wrong
choice and went to jail for his part
in the price fixing, a violation of
the Sherman Antitrust Act.17
Corporate Ethics Programs
Ethics training is a key part of
business ethics. It assists employees
and management in clarifying their
own ethical paradigms and doing
the right thing when confronted
with ethical dilemmas. In conjunction with a code of ethics, ethics
training serves as an organization’s
guiding framework. Training can
be delivered in many ways, such
as web-based training, webcasts
and in-person training programs,
thus accommodating schedules and
different learning preferences and
taking advantage of cost-savings
opportunities. Legislation makes
compliance critical (see U.S. Sentencing Guidelines for Organizations,
adopted in 1991 and updated in
2004, www.ussc.gov/orgguide.
htm). Publicly traded companies
subject to the Sarbanes-Oxley
Act of 2002 (SOX) must have a
code of ethics designed to deter
wrongdoing, including a statement
promoting financial integrity that
clearly applies to senior financial
officers (see SHRM article about
the Sarbanes-Oxley Act). Additional U.S. federal laws that cover
unethical business practices include
the Foreign Corrupt Practices Act
of 1977 (FCPA), which prohibits
corrupt payments to foreign officials
for the purpose of obtaining or
keeping business; mail and wire
fraud statutes, 18 U.S.C. § 1341,
1343; The Travel Act, 18 U.S.C.
§ 1952, which provides for federal
prosecution of violations of state
commercial bribery statutes; and
Federal Sentencing Guidelines,
particularly §8.B2.1, regarding
the components of an effective
compliance and ethics program.
Based on the Federal Sentencing
Guidelines, the Ethics Resource
Center (ERC) outlines six elements necessary for a comprehensive
ethics and compliance program:
1) written standards for ethical
conduct; 2) training on ethics; 3)
a mechanism to seek ethics-related
advice or information; 4) a process
to report misconduct anonymously;
5) disciplinary action of employees who violate the organization’s
ethics standards or the law; and 6)
inclusion of ethical behavior within
each employee’s regular performance appraisal. The SHRM/
ERC 2008 survey report on ethics
found that most organizations do
not have a comprehensive ethics
and compliance program. Only
23% of HR professionals reported
that their companies had all six
elements, yet other factors were in
place: 88% of HR professionals said
that their organizations disciplined
employees who violated the company standards, 75% had written
standards for ethical conduct, 74%
had a mechanism to report violations confidentially or anonymously,
and 66% had orientation or training
on ethics. In contrast, more than
50% of organizations did not have
a specific mechanism for employees to seek advice on ethics-related
matters, and 57% did not evaluate employees on ethical conduct
in their performance reviews. The
most common types of misconduct
seen by HR professionals were
abusive or intimidating behavior
toward employees (excluding sexual
harassment); e-mail and/or Internet abuse; inaccurate reporting
of actual hours worked; employee
behavior putting the employee’s
interests above those of the organization’s; and employees taking
sick days when they are not sick.18
The 2009 National Business Ethics
Survey from ERC found that during
the recession, 81% of employees
have confidence in their company’s
executives, only 23% believe that the
recession has negatively affected the
ethical culture within the company,
and 10% believe that in order to
stay in business during the recession, their company has lowered
Figure 3 | Questions and Lessons for Ethical Decision-Making
QQ
What is the biggest ethical dilemma you have experienced in your career?
QQ
How did you respond?
QQ
What was the outcome?
QQ
What did you learn?
QQ
How did you transfer this learning or experience into teachable moments for others?
Source: Tichy, N. M. (2003). Students meet ethical dilemma in their workplace challenges. In N. M.
Tichey & A. R. McGill (Eds.), The ethical challenge: How to lead with unyielding integrity (pp. 211–230).
San Francisco: Jossey-Bass.
Business Ethics: The Role of Culture and Values for an Ethical Workplace 5
values and moral positions of an
employee may end up in juxtaposition with the policies and behavior
of the employer, through confusion,
inconsistency, and poor management communication and practices,
bringing forth questions of fairness.
its ethical standards. Employees
see their leadership—even during
these difficult economic times—as
trustworthy, with 81% of respondents trusting that company executives are telling the truth about the
well-being of the organization. The
study also found that with more
focus on business ethics, misconduct
decreases: specifically, misconduct
declined after 2002, when SOX was
passed, then increased over the next
four years, and then declined again
during the recession (see Figure 4).19
Mini-Case Study: A Lack
of Transparency
An employee had worked for
nearly 30 years at a well-established, fiscally sound bank in the
commercial market. Unexpectedly, she found herself needing
to take time off for the care of her
sick husband. Saturday morning,
her husband was rushed to the
hospital to undergo emergency
surgery, and on Monday he was
placed in intensive care. On that
Monday, the employee made a
request to her manager to use
some of her 10 months of accrued sick leave to care for her
husband. FMLA was approved,
but she was told that according
to the HR department, she must
use vacation time rather than
sick leave.
Ethics and Perceptions
of Fairness
Perceptions of fairness are closely
tied to business ethics, at the root
of which are questions of justice.
Also known as “organizational
justice,” it encompasses fairness
of outcomes and allocation of
resources, fairness of decisionmaking processes and fairness of
interpersonal treatment from the
supervisor. In today’s litigious
environment, organizations must
be transparent, equitable, consistent
and fair in their policy development
and administration. The following example illustrates how policy
applied inconsistently can negatively
affect employee morale. Individual
After being out for a couple
weeks, with more than two-thirds
of her FMLA entitlement re-
Figure 4 | The Increase and Decrease of Misconduct Over Time
Timeline of Misconduct
Subprime,
Madoff,
recession
Percentage of workforce
observing misconduct
Enron, etc.
55%
52%
56%
49%
46%
2000
2003
2005
2007
2009
NBES Survey Years
Source: Ethics Resource Center. (2009, October). 2009 National Business Ethics Survey, www.ethics.org
6
maining, the employee returned
to work. Her manager and a senior HR officer ushered her into
a meeting to discuss the terms
of her return to work. “We’re
concerned about your ability to
come back. We can’t have you
taking long lunches or leaving
early to visit your husband.” The
employee assured them that this
had not been her plan but asked
why it would be a problem if an
occasional need were to arise.
“If we let you do it, we’d have
to let everyone do it.” Although
she had planned to retire in less
than six months, at this point, the
employee was very upset and
her view of the company was
negatively affected by this exchange and lack of support. She
later learned that sick leave use
for family members was discretionary at the determination of
the manager. An HR officer also
informally counseled her, saying
“if your own doctor were to say
you are too stressed to work,
your sick hours would more than
carry you through your planned
retirement date, plus you’ll get
another annual profit-sharing
check.” This sentiment was
echoed to her by several other
bank officers.
The poorly communicated and inappropriately administered policies—
such as the FMLA leave—coupled
with lack of sensitivity by management and subsequently perceived
unfairness—largely contributed to
the distress of the employee. This
example illustrates how lack of
transparency of company policies
can create confusion and lead to an
unethical subculture. In this case,
vague policies allowed line and
human resource managers to permit
or deny leave on a case-by-case basis.
While denying sick leave may save
the company money in the short
term, the cost is also reflected in
decreased employee morale, with the
likely loss of valuable human capital.
Transparent procedures are
important. They allow managers
to emphasize the importance of
decision-making for all employees
to minimize the belief that some
receive favorable treatment or
differences based on other biases.
When focus is placed on respecting employees and their rights, the
quality of interpersonal relationships
in the workplace improves. When
people are treated with dignity
and courtesy, commitment to the
organization increases along with
productivity.20 Ultimately, the question that HR and organizational
leaders should ask is, are our own
policies inadvertently shaping our
corporate cultures in ways that will
undermine the reputation of the
company and ultimately cost the
company the loss of talent, production, customer service and profits?
Global Perspective
One popular topic for HR professionals in the last few years has
been the need to develop a global
mindset, but this need has been
viewed mostly through the context of individual development.
SHRM interviewed Lorelei Carobolante, SCRP, GMS, GPHR,
SHRM Global Special Expertise
Panel member and CEO/president of G2nd Systems, who has
extensive expertise in the area of
intercultural communications.
“We often fail to recognize that the
establishment of such cultural norms
within an organization has many
more business ramifications than
the often-cited cases of employees
assigned to foreign locations and
their struggle to become effective
contributors,” says Carobolante.
“As our workforce, anywhere in the
world, is becoming more culturally
diverse, developing a global mindset
is just as important at the local level
as it is globally. It applies as equally
to a manager in Singapore as to a
“When a manager is able to communicate in a culturally neutral
fashion, employees are not put at
a disadvantage in their ability to
succeed as a result of poor communication skills by the manager. Even
if an employee is uncertain about
The need for global organizations to work virtually
across functions and geographies increases and
intensifies, with implications for intercultural
communication, business ethics and
organizational effectiveness. A new approach
is needed to develop global workforce cultures,
with better understanding of transnational
teams, online collaboration, globalization
and business process transformation.
Source: Future Insights (SHRM, 2009)
manager in Toledo, Ohio. For example, we often associate communication style with culturally different
norms and therefore typically consider it merely an issue of ’etiquette.’
Sometimes, we also appreciate its
effect on productivity, but we rarely
recognize its ethical implications.”
“When a manager provides employees with the same desk, the same
computer, the same tools, but fails
to provide instructions that are
equally understood and interpreted
by native and non-native Englishspeaking employees, not only does
the manager foster a lack of productivity from employees who cannot
understand the subtle implications derived from culturally based
expressions, but the manager then
does not actively support (and can
potentially damage) an employee’s
ability to excel, be successful and
develop his or her professional
career,” Carobolante continues.
the meaning of what he or she is
told, the employee most likely will
not ask for clarification—for fear
of been perceived as less intelligent
[or having an English proficiency
or cultural-difference problem].”
This example clearly illustrates
the relationship between business ethics and productivity,
and the ethical responsibility for
clear communication on the part
of the manager, as Carobolante
explains. A lack of understanding
of these dynamics often leads to:
1) Poor team performance, as some
employees can establish relationships, while others find it difficult.
2) Inconsistent productivity across
the organization, as some
employees are well attuned with
the goals, while others, though
equally talented, tend to isolate
themselves.
Business Ethics: The Role of Culture and Values for an Ethical Workplace 7
3) Employee dissatisfaction, as isolation tends to facilitate a sense of
inequality and unfair treatment
and leads to decline in employee
engagement—a direct connection
to productivity.
4) Ultimately, employee retention
problems, as talented individuals
who do not feel appreciated and
lose faith in their ability to grow
within the organization will leave
the company.
As Carobolante concludes, “What
is most difficult to recognize is the
ethical responsibility associated
with today’s new globally diverse
workplace, which requires managers
to communicate effectively across
multiple cultures at the same time
so that all employees will have equal
levels of participation, thus being
able to contribute their expertise,
creativity and commitment to
reach the organization’s goals.”
Endnotes
1
2
Society for Human Resource
Management & the Ethics Resource
Center. (2008, June). The ethics
landscape in American business.
Alexandria, VA: Authors.
3
Weaver, G. R. (1993). Corporate
codes of ethics: Purpose, process
and content issues. Business and
Society, 32(1), 44-58.
4
Weaver, G.R., Treviño, L. K., &
Cochran, P. (1999). Corporate
ethics programs as control systems:
Influence of executive commitment
and environmental factors. Academy
of Management Journal, 42 (1);
41-57.
5
Ibid.
6
Tyler, T., Dienhart, J., & Thomas,
T. (2008, Winter). The ethical commitment to compliance: Building
value-based cultures. California
Management Review, 50(2), 31-51.
In Closing
The message sent by leadership
through organization culture determines the tone of business ethics in
the workplace—how it is defined,
perceived, promoted, demonstrated
and “lived.” Based on a foundation
of solid and clear corporate values
for ethical behavior, the right decisions can be made, thus fostering
trust, fairness, transparency and
compliance. With organizations
becoming more global and more
virtual, leaders must understand
people of different backgrounds,
cultures, values and perspectives.
Ultimately, the ethical workplace
is the common link between
culture, values and leadership
and productivity, organizational
reputation and sustainability.
8
Business Roundtable—Institute
for Corporate Ethics. (2009). The
dynamics of public trust in business—
Emerging opportunities for leaders.
Retrieved July 16, 2009, from
www.corporate-ethics.org.
7
Ethics Resource Center. (2009,
November). 2009 National Business
Ethics Survey. Retrieved from
www.ethics.org.
8
Treviño, L. K., & Weaver, G. R.
(2003). Managing ethics in business
organizations. Stanford, CA: Stanford University Press.
9
Society for Human Resource
Management & the Ethics Resource
Center. (2008, June). The ethics
landscape in American business.
Alexandria, VA: Author.
Ethics Resource Center. (2006).
Critical elements of an organizational ethical culture. Retrieved
September 25, 2009, from
www.ethics.org/resource/criticalelements-organizational-ethicalculture.
10
Berenbeim, R. E., & Dubinsky, J.
E. (2008, January). Working at the
intersection of human resources
and business ethics: The need for
collaboration. Executive Action series
[The Conference Board], 2–9.
11
Guss, E., & Miller, M. C. (2008,
October). Ethics and generational
differences: Interplay between
values and ethical business decisions [white paper]. Retrieved from
www.shrm.org.
12
Deal, J. J. (2007). Retiring the
generation gap: How employees young
and old can find common ground.
San Francisco: Jossey-Bass and the
Center for Creative Leadership.
13
Society for Human Resource Management. (2008, July). Volunteerism:
Moving up on the strategic agenda.
Alexandria, VA: Author.
14
Deloitte. (2008). 2007 volunteer IMPACT survey. Retrieved
September 10, 2009, from
www.deloitte.com.
15
De Colle, S., & Werhane, P. H.
(2007, Spring). Moral motivation
across ethical theories: What can we
learn for designing corporate ethics
programs? Journal of Business Ethics,
81, 751-764.
16
Urbany, J.E., Reynolds, T.J., & Phillips, J. M. (2008, Summer). How
to make values count in everyday
decisions. MITSloan Management
Review. Retrieved July 16, 2009,
from www.sloanreview.mit.edu.
17
Society for Human Resource
Management & the Ethics Resource
Center. (2008, June). The ethics
landscape in American business.
Alexandria, VA: Authors.
18
Ethics Resource Center. (2009,
November). 2009 National Business
Ethics Survey. Retrieved from
www.ethics.org.
19
Tyler, T., Dienhart, J., & Thomas,
T. (2008, Winter). The ethical commitment to compliance: Building
value-based cultures. California
Management Review, 50(2), 31-51.
20
PROJECT TEAM
Project leader:
Nancy R. Lockwood, M.A., SPHR, GPHR, manager, HR Content Program, SHRM Research
Project contributors: Leslie Altizer, senior director of benchmarking services, Ethics Resource Center
Lorelei Carobolante, SCRP, GMS, GPHR SCRP, CEO/president, G2nd Systems
Joy M. Gaetano, SPHR, principal, Gaetano Group
Norman Howard, director of human resources, W.K. Kellogg Foundation
Marty Val Hill, SPHR, president, Live Your Legacy
Steve Williams, Ph.D., SPHR, director, SHRM Research
External reviewers: SHRM Ethics Special Expertise Panel
Catherine Bishop, SPHR
Daniel Carey
Michael J. Colledge, SPHR, CCP
Andrea J. Corbett, PHR
Arthur Crane, CCP, SPHR
Peter J. Eide, SPHR
Joy M. Gaetano, SPHR
Marty Val Hill, SPHR
SHRM Global Special Expertise Panel
Lorelei Carobolante, SCRP, GMS, GPHR SCRP
ABOUT SHRM
The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management.
Representing more than 250,000 members in over 140 countries, the Society serves the needs of HR professionals and advances
the interests of the HR profession. Founded in 1948, SHRM has more than 575 affiliated chapters within the United States and
subsidiary offices in China and India. Visit SHRM Online at www.shrm.org.
Copy editing:
Graphic design:
Katya Scanlan, copy editor
Terry Biddle, graphic designer
© 2009 Society for Human Resource Management. All rights reserved.
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ISBN: 978-1-586-44191-3
09-0711